By LYNETTE KHOO
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TROUBLED firm FibreChem Technologies has announced a default on a US$35 million facility.
'The event of default was by reason of the suspension of trading in the company's shares,' it said.
The US$35 million facility agreement dated Aug 18, 2006, was entered in between the company and a consortium of local and international banks.
Under the facility agreement, the banks offered the group a term loan facility to refinance the existing indebtedness of the group or financing the general corporate funding requirements of the group.
But due to the default, the total commitments under the facility agreement are cancelled and the term loan, together with accrued interest, is immediately due and payable.
The company said that it was notified that the outstanding principal amount of the term loan is US$26.25 million and accrued interest as at March 12 was US$115,581.78.
FibreChem had earlier disclosed on Feb 25 that its auditors Ernst & Young could not finalise an audit of its trade receivables and cash balances for the year ended Dec 31, 2008.
Trading of its shares has been suspended since.
It has also appointed nTan Corporate Advisory as an independent investigator and financial adviser to look into the matter and advise on measures to keep the business going.
Its executive chairman and CEO, James Zhang, has resigned, but offered to cooperate fully with the board.
FibreChem also set up an independent working committee, comprising non-executive directors to oversee the investigation and business continuity.
As the investigations are underway, the group has applied for an extension of time with SGX to report its financial statements for the year ended Dec 31, 2008. It was granted a three-month extension to do so by May 31.
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